Scotgold Resources Ltd said it produced and sold record amounts of gold in the second quarter from its Cononish gold and silver mine in Scotland, lifting its shares as much as 10%.
"This has been our strongest quarter yet for Scotgold, characterised by record gold production which exceeded guidance, record gold sales translating into significant cash generation and continued progress on the ground to meet our production and operational targets,” said chief executive Phil Day.
It produced 3,531 ounces of gold, a 188% jump from the first quarter of 2022, easily beating its second-quarter guidance of 2,600 to 3,200 ounces.
Scotgold said it experienced three consecutive months of positive operating cash flow on 30 June, making it Scotland’s first commercial gold producer.
The company sold 415 tonnes of gold concentrate in the quarter for £5.0mln, taking its gold sales to £6.3mln for the first half.
It expects revenue from the second quarter to enable it to pay for the mine optimisation and tailings thickener initiatives as planned. It also received the second tranche of the Fern Wealth Debt Facility in June totalling £2.1mln.
The AIM-traded company expects to produce 2,900-3,500 ounces of gold in the third quarter as the mine continues to be developed.
"In the short term, we are focusing on our transitional optimisations at Cononish, undertaking low capex initiatives to continue to drive the production ramp up,” said Day.
“The recent arrival of our thickener, currently undergoing installation in our process plant, will bolster our throughput of ore, generating further increases in gold concentrate output. Furthermore, with our 2022 mine development work, we continue to move rapidly towards phase 2 production levels of 23,500oz run rate of gold.
“We remain impressed with Cononish's high-grade gold geology and anticipate that the operations and cost control discipline of our team will enable the mine to be even more cash generative and profitable as it moves from phase 1 to phase 2 production."
The shares were up 6.9% at 77.50p in early trading, after touching 80p earlier.